- Thursday, 24 October 2013 18:26
As has been widely reported in the mainstream media, Canada and the EU have reached agreement in principle for a free trade deal known as the Comprehensive Economic & Trade Agreement (more commonly referred to as CETA). Various stories have speculated on the effects of CETA upon the Canadian wine industry. It is not possible to comment with certainty upon any effects until such time as the actual text of the agreement is publicly available. However, it has become apparent from briefing notes, that it is unlikely that CETA will have any significant effect upon the BC wine industry. As has been previously reported, CETA does away with all tariffs on wine between Canada and the EU (in both directions). In practice and for the Canadian market, this means the removal of a very small (and basically insignificant) tariff that is currently applied to European wines entering Canada. It also requires some changes to the way that the LCBO (Ontario's liquor board) applies "cost of service" fees to wine sold in that province. However, it preserves the existing exclusive distribution channels for domestic wine in certain private retail stores (in BC, these are the VQA stores) and it preserves the ability of wineries to sell from their own tasting rooms (direct delivery). As a result, there appear to be very few effects on the BC wine industry. CETA may, in fact, provide benefits to BC wineries that use European products in their manufacturing processes as any Canadian tariffs on those products will be removed.